Circular A 4140: Derogation of Fixed-Term Deposits in US Dollars Payable in Pesos

"2004 - Year of the Argentine Antarctic"
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMMUNICATION "A" 4140 14/05/2004
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 421
OPASI 2 - 352
OPRAC 1 - 570
Fixed-term deposits in US dollars payable in pesos.
Derogation.

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We address you to inform you that this Institution adopted the following resolution:

"- To render ineffective point 1.8.2.2. of Section 1 of the regulations on "Fixed-term deposits and investments," relating to fixed-term deposits in US dollars payable in pesos. This measure shall take effect from the day following its publication, maintaining in force the various provisions applicable to this modality until the maturity of existing deposits."

We send you attached the update of the regimes applicable to foreign currency lending capacity (point 1. of the resolution disseminated by Communication "A" 3528 -text according to Communication "A" 4015-) and net foreign currency global position (point 1. of the resolution disseminated by Communication "A" 3889 -text according to Communication "A" 4135, with effect from 1.7.04-) and the sheets that, in replacement of those previously provided, must be incorporated into the ordered text of the regulations on "Minimum cash" and "Fixed-term deposits and investments".

We greet you very respectfully.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Ana María Lemmi José Rutman
Submanager of
Norms Issuance
Main Manager of Norms

ANNEXES

B.C.R.A. FOREIGN CURRENCY LENDING CAPACITY
Annex I to
Com. "A"
4140
"1. Establish that the lending capacity arising from deposits constituted in foreign currency shall be applied, interchangeably, to the following destinations:
1.1. Pre-financing and financing of exports carried out directly or through agents, consignees or other intermediaries acting on behalf and order of the owner of the goods, as provided in Communication "A" 3818.
1.2. Financing granted to producers or processors of goods, provided they have firm sales contracts for the merchandise to be produced to an exporter, with price fixed in foreign currency and the goods are fungible and have a normal and habitual quotation, in foreign currency, widely disseminated and easily accessible to public knowledge in local or international markets.
1.3. Financing to producers of goods to be exported, either in the same state or as an integral part of other goods, by third-party purchasers thereof, provided they have total guarantees in foreign currency from said third parties.
1.4. Debt securities or certificates of participation in financial trusts -including other specifically recognized receivable rights in the trust contract to be constituted under the framework of "BID Loan No. 1192/OC-AR"- whose underlying assets consist of loans originated in financial entities under the conditions referred to in points 1.1. to 1.3.
By way of exception, attribution of up to 10% of the lending capacity is also admitted for financing that has other destinations, different from those mentioned above, included in the credit program referred to in that loan of the Inter-American Development Bank.
1.5. Inter-financial loans.
Entities must identify the inter-financial loans granted with these resources.
1.6. Bills of the Central Bank of the Republic of Argentina in US dollars, acquired in auctions or by secondary negotiation.
Entities must verify that the financing agreed upon and the maturities established bear a relationship to the expected income flow in the currency of grant of the loans. Loans granted must be settled in the Single and Free Foreign Exchange Market. The resulting lending capacity will be the sum of deposits in foreign currency and inter-financial loans received, which have been identified by the granting financial entity as coming from its lending capacity of deposits of that kind, net of the deduction of the minimum cash requirement on deposits. Defects in application will be subject to an equivalent increase in the minimum cash requirement in foreign currency."

B.C.R.A. NET FOREIGN CURRENCY GLOBAL POSITION
Annex II to
Com. "A"
4140
"1. Provide that the absolute value of the net foreign currency global position -monthly average of daily balances converted to pesos at the reference exchange rate- shall not exceed 30% of the calculable equity responsibility of the month prior to the one corresponding. When the net foreign currency global position is positive, the amount shall not exceed this ratio or the liquid own resources, whichever is lower. Liquid own resources are understood as the calculable equity responsibility minus immobilized assets and financing to related clients, according to the criteria established in the respective technical report. Additionally and without prejudice to the observance of the limit established above, the net global position, considering the balances of checking accounts and other assets and liabilities included -regardless of their nature or character of the operation- realizable (in the sense that they are assets negotiable in a habitual manner and by significant volumes in institutionalized markets) or with maturity within the following 180 days, shall not exceed the percentage -applied on the calculable equity responsibility of the month prior to the one corresponding- that shall be established in due course. For the determination of the preceding position, only titles that are registered in accounting at market value shall be considered, without prejudice to the computation in the position of services whose maturity occurs within 180 days. In the global foreign currency position, all assets and liabilities for foreign currency financial intermediation and in foreign currency titles (for spot and forward operations) shall be considered, including derivative contracts linked to these concepts, the items to be computed in the General Foreign Exchange Position, deposits in that currency in accounts opened at the Central Bank, as well as the gold position and the Bills of the Central Bank of the Republic of Argentina in US dollars. The value of the position in currencies other than the US dollar shall be expressed in that currency, applying the respective swap rate published by this Institution. Excesses to these ratios shall be subject to a charge equivalent to twice the nominal annual interest rate due resulting from the auctions of the Bills of the Central Bank of the Republic of Argentina in US dollars or twice the LIBO rate for 30-day term for operations in that currency, reported for the last business day of the pertinent month, whichever is higher. To determine the charge based on the interest rate of the Bills of the Central Bank of the Republic of Argentina, the accepted cut-off rate reported by this Institution shall be taken into account, which is expressed as a nominal annual rate due, corresponding to the last auction carried out in the period under report. If bills are awarded for different terms on the same date, the rate corresponding to the operation with the shortest term shall be considered."

MINIMUM CASH B.C.R.A.
Section 1. Requirement.
Version: 17a. COMMUNICATION "A" 4140
Validity:
14/05/2004
1.3. Minimum cash.
The amounts of minimum cash resulting from applying the following rates shall be integrated:

Concept Rate in %
1.3.1. Checking account deposits. 20
1.3.2. Savings account deposits. 20
1.3.3. Pupillary usury, special accounts for closed circles, "Unemployment Fund for workers in the construction industry", "Payment of remuneration", special checking accounts for legal entities and pension savings account. 20
1.3.4. Other demand deposits and obligations, pension benefits credited by ANSES pending actualization and immobilized balances corresponding to obligations included in these regulations. 20
1.3.5. Unused balances of formalized current account advances. 20
1.3.6. Demand placements -regardless of the form of deposit- which, at a minimum, must constitute the credit of common investment funds (as provided in the Regulations of the National Securities Commission). 80
1.3.7. Deposits in checking accounts of non-bank financial entities, computable for the integration of their minimum cash. 100
1.3.8. Fixed-term deposits, obligations for "acceptances" -including liabilities for sale or assignment of credits to subjects other than financial entities-, passive swaps, sureties and passive stock swaps, investments for a constant term, with option for early cancellation or renewal for a determined term and with variable remuneration, and other obligations for a term, with the exception of deposits included in point 1.3.12., according to their residual term:
i) Up to 29 days. 18 ii) From 30 to 59 days. 14 iii) From 60 to 89 days. 10 iv) From 90 to 179 days. 5 v) From 180 to 365 days. 3 vi) More than 365 days. 0

MINIMUM CASH B.C.R.A.
Section 1. Requirement.
Version: 17a. COMMUNICATION "A" 4140
Validity:
14/05/2004
Deposits with "CER" clause and those included in the "Deposit Rescheduling Regime" are included in this point -excluding those reached according to its point 6.5., in their entirety or partially if appropriate based on the nature of the judicial decision-.
1.3.9. Obligations for foreign financial lines (not instrumented through fixed-term deposits or debt securities to which the requirements provided in points 1.3.8. and 1.3.10. apply, respectively). 0
1.3.10. Debt securities (including debentures).
a) Debt issued from 1.1.02, including those from restructured obligations, according to their residual term:
i) Up to 29 days. 18 ii) From 30 to 59 days. 14 iii) From 60 to 89 days. 10 iv) From 90 to 179 days. 5 v) From 180 to 365 days. 3 vi) More than 365 days. 0 b) Others. 0
1.3.11. Obligations with the Fiduciary Fund for Assistance to Financial and Insurance Entities. 0
1.3.12. Demand and fixed-term deposits made by order of the Judiciary with funds originated in the cases in which it intervenes, and their immobilized balances. 10
1.3.13. Special accounts in US dollars intended for the deposit of guarantees required in futures and options operations carried out in self-regulated markets subject to the control of the National Securities Commission. 100
1.3.14. Special demand accounts in foreign currency. 100
1.4. Residual term.
1.4.1. Determination.

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE REGULATIONS ON "MINIMUM CASH" ORDERED TEXT ORIGIN REGULATION Sec. Point Para. Com. Annex Sec. Point Para. OBSERVATIONS
1.1. "A" 3274 II 1. 1.1.
1.1.1. "A" 3274 II 1. 1.1.1. According to Com. "A" 3498.
1.1.2. "A" 3274 II 1. 1.1.2. According to Com. "A" 3597.
1.1.3. "A" 3274 II 1. 1.1.3. According to Com. "A" 3498 and "A"
3905.
1.2. "A" 3274 II 1. 1.2. According to Com. "A" 3304, "A"
3498 and "A" 3597.
1.3. "A" 3274 II 1. 1.3.
1.3.1. "A" 3274 II 1. 1.3.1. According to Com. "A" 3338, "A"
3417, "A" 3498, "A" 3597, "A"
3917, "A" 3967, "A" 4032 and
"A" 4051.
1.3.2. "A" 3274 II 1. 1.3.2. According to Com. "A" 3338, "A"
3417, "A" 3498, "A" 3597, "A"
3917, "A" 3967, "A" 4032 and
"A" 4051.
1.3.3. "A" 3274 II 1. 1.3.3. According to Com. "A" 3338, "A"
3399, "A" 3417, "A" 3498, "A"
3597, "A" 3824, "A" 3917, "A"
3967, "A" 4032 and "A" 4051.
1.3.4. "A" 3274 II 1. 1.3.4. According to Com. "A" 3338, "A"
3417, "A" 3498, "A" 3597, "A"
3917, "A" 3967, "A" 4032 and
"A" 4051.
1.3.5. "A" 3274 II 1. 1.3.5. According to Com. "A" 3338, "A"
3417, "A" 3498, "A" 3597, "A"
3917, "A" 3967, "A" 4032 and
"A" 4051.
1.3.6. "A" 3274 II 1. 1.3.6. According to Com. "A" 3365, "A"
3498 and "A" 3967.
1.3.7. "A" 3274 II 1. 1.3.7.
1.3.8. "A" 3498 unique 1. 1.3.8. According to Com. "A" 3506 - pt.
2.-, "A" 3549, "A" 3732, "A"
3824, "A" 3905, "A" 3917, "A"
3925, "A" 3967, "A" 4032 and
"A" 4140.
1.3.9. "A" 3498 unique 1. 1.3.11. According to Com. "A" 3597, "A"
3732 and "A" 4032.
1.3.10. "A" 3498 unique 1. 1.3.12. According to Com. "A" 3905, "A"
3917, "A" 3967 and "A" 4032.
1.3.11. "A" 3549 1.
1.3.12. "A" 3549 1.
1.3.13. "A" 3566 5.
1.3.14. "A" 3583 3.
1.4. "A" 3905 3.
1.
1.5. "A" 3274 II 1. 1.5. According to Com. "A" 3498.

FIXED-TERM DEPOSITS AND INVESTMENTS B.C.R.A.
Section 1. Fixed-term.
Version: 7a. COMMUNICATION "A" 4140
Validity:
14/05/2004
1.8.2. US dollars and euros.
i) Total or partial cancellations must be effected in the same type of asset (bills or transfers) in which the funds were deposited. ii) When the deposit was made in bills, the depositor may opt, at the time of total or partial withdrawal, to receive bills or transfers, or crediting in checking accounts in dollars.
1.8.3. Other currencies.
At the request of the entities, the Central Bank of the Republic of Argentina may authorize the capture of fixed-term deposits in other currencies. For cancellations, the criterion referred to in point 1.8.2. shall apply.
1.8.4. Public and private debt securities.
i) They may only be captured by banks and financial companies. ii) They must have normal and habitual quotation in the country or abroad, widely disseminated and easily accessible to public knowledge. iii) Private securities must have public offering authorized by the National Securities Commission.
1.9. Deposits with "CER" clause.
The deposit amount shall be updated by applying the value of the Reference Stabilization Coefficient ("CER") resulting from comparing the indices of the banking business day prior to the date of constitution and that of the same antecedence to the maturity date. These deposits may only be made in pesos.

FIXED-TERM DEPOSITS AND INVESTMENTS
ORDERED TEXT ORIGIN REGULATION
Sec. Point Para. Com. Annex Cap. Sec. Point Para.
OBSERVATIONS
1.7. "A" 1653 I 3.4.1.
1.7.1. "A" 1653
"A" 1913
I 3.4.2.
2. 2nd
1.7.2. "A" 3043
1.8.1. "A" 1199 I 3.
1.8.2. "A" 1820 I 3.2. 2nd S/Com. "A" 3293, "A"
3527, "A" 3682 -pt.
10.-, "A" 3827 -pt. 9.- and "A" 4140.
1.8.3. "A" 1820 I 3.2. 1st
1.8.4. "A" 1465 I 2.
1.8.4. i) "A" 2275 2. 1st
1.8.4. ii) "A" 2275 2.1.
1.8.4. iii) "A" 2275 2.1.
1.9. "A" 3660 According to Com. "A" 3827,
pt. 9.
1.10.1. "A" 1465
"A" 1653
"A" 1820
I
2.1.2.
3.1.1.2.
3.3.1.2.
3.4.
According to Com. "A" 3660.
1.10.2.1. "A" 2188 2.1. 1st S/Com. "A" 2962 -pt.
2.1.- and "A" 3660.
1.10.2.2. "A" 2188 2.1. 2nd S/Com. "A" 2962 -pt.
2.2.- and "A" 3660.
1.10.2.3. "A" 2188 2.3. S/Com. "A" 2962 -pt.
2.2.- and "A" 3660.
1.10.3. "A" 3660
1.10.4. 1st "A" 1199 I 5.3.2. According to Com. "A" 3660.
1.10.4.1 "A" 1465 I 2.1.2. 2nd According to Com. "A" 3660.
1.10.4.2. "A" 3660
1.10.5.1. "A" 1199 I 5.3.2. According to Com. "A" 3660.
1.10.5.2. "A" 2482 2. According to Com. "A" 3660.
1.11.1.1. "A" 1653
"A" 1820
"A" 2061
I 3.1.1.1.
3.3.
1.1.1.
According to Com. "A" 3485,
"A" 3527, "A" 3660, "A"
3682 -pt. 11.-, "A"
3827 -pt. 9.- and "A"
4032.
1.11.1.2. "A" 1465
"A" 1603
"A" 2275
I 2.1.1.
5.
2.
According to Com. "A" 3660.
1.11.2. "A" 2188 1. According to Com. "A" 3660.
1.11.3. "A" 3660 According to Com. "A" 3660.
1.12.1. 1st "A" 1653 I 3.4.13.2.
2nd "A" 3043
According to Com. "A" 3660.
1.12.2. "A" 1653 I 3.4.13.1. According to Com. "A" 3660.
1.
1.13.1. "A" 1653 I 3.4.13.3. 1st According to Com. "A" 3660.